Two key monthly reports about British retail sales and wider consumer spending agreed on one main thing on Tuesday — both are slowing down.

The regular Barclays consumer card spending report (which also covers retail sales) and the British Retail Consortium/KPMG report on retail sales specifically blamed consumer caution about what next month’s annual Budget might contain.

So let’s look at Barclays first. It said consumer card spending declined 0.7% year-on-year in September, down from 0.5% growth in August and much lower than the latest CPIH inflation rate of 4.1%. Essential spending fell 2.6%, while growth in discretionary spending continued, but it slowed to just 0.2%.

At least clothing furniture and beauty all had stronger months “as affordable ‘pick-me-up’ purchases were prioritised amid wider cutbacks”. 

In fact, clothing spend rose 2.1% and transaction growth was 3.1%, although again, both figures lagged the inflation rate. But the figures still marked eight months of year-on-year growth, as 20% of shoppers reported spending more on clothes, shoes and accessories in September.

Pharmacy, health & beauty spend rose an impressive 9% with transaction numbers falling 0.6% suggesting beauty is able to push through higher prices.

Some spending last month was hit by transport strikes in London. Spending on public transport saw its greatest decline since March 2021 in September, down 2.6%, following widespread tube strikes. Over one in three Londoners said strike action reduced their monthly outgoings and their non-food retail spend was down by £26 less. 

Overall, face-to-face spending decreased 1.6% across the UK – its greatest fall since June 2024.

Barclays also said consumer confidence in the strength of the UK, European and global economy all fell in September, to 25%, 29% and 26%, respectively. But consumers’ belief in their ability to live within their means reached its highest level in over four years, at 78%.

This comes as 44% of UK adults say they’re making changes to their personal finances in anticipation of November’s Autumn Budget, with 35% of this group building a savings buffer.

Meanwhile, the BRC/KPMG report for the five weeks to 4 October showed total retail sales rising up but more slowly. Sales rose 2.3% while non-foods grew only 0.7%, below the 12-month average growth of 0.9%.

In-store non-food sales increased by 0.5%, lower than the growth of 0.8% in September 2024.

Online non-food sales increased by 1%, well short of the growth of 3.4% in September 2024.

Helen Dickinson, the BRC’s chief executive, said: “With the Budget looming large, and households facing higher bills, retail spending rose more slowly than in recent months. Milder weather meant shoppers delayed refreshing autumn and winter wardrobes.

“Rising inflation and a potentially taxing Budget is weighing on the minds of many households planning their Christmas spending. Retailers also face difficult decisions about investment and hiring over the Golden Quarter given uncertainty over business rates bills arriving in April. The future of many large anchor stores and thousands of jobs remains in jeopardy while the Treasury keeps the risk of a new business rates surtax on the table. By exempting these shops when the Budget announcements are made, the Chancellor can reduce the inflationary pressures hammering businesses and households alike.”